A third of therapists reported making more in profit in 2024 than in 2023, a new report finds.
Heard’s financial state of private practice report, in its third year, was based on a survey that reached more than 3,000 therapists, including Heard clients. Heard is a financial management software company for private practice therapists.
A third of respondents reported making $100,000 or more in gross income in 2024, up from 2023. One in 3 therapists raised their fees in 2024, and 41% plan to raise their fees in 2025.
Still, despite slight profit gains, uncertainty remains: 85% of therapists are concerned about the financial impact of the Trump administration on their practice. “Year over year, therapists are doing better financially, but there’s also concern about what the next four years are going to look like,” Michael Fulwiler, director of brand at Heard, told Fierce Healthcare.
Self-employed therapists working with federally funded organizations may be especially impacted. Beyond direct impact, fears about the broader macroeconomic landscape also persist: If the U.S. slides into a recession, or people lose Medicaid benefits, consumers may not prioritize therapy the way they did in the early days of COVID-19, per Fulwiler. There are also concerns about loan forgiveness among those who have student debt. In 2023, more than half of therapists worried about the economy, a past Heard report found.
Nearly all therapists see patients either virtually or both virtually and in person, the latest survey found. A third of respondents also offer therapy outside their own state via telehealth.
More than a third of respondents earned income from non-therapy sources, including from consulting, supervision, teaching and speaking. When it comes to the biggest expenses, rent ranked the highest (36%), followed by professional development and training and software or accounting fees. Expenses increased slightly in 2024 from 2023.
While 4 in 10 therapists have no student loan debt, more than a fifth have debt worth more than $100,000. One in 3 therapists named paying off debt as their top financial goal for 2025. A fifth also prioritize diversifying their income and saving for retirement.
Word-of-mouth referrals are the top way therapists find new clients, followed by Psychology Today. Other online directories were in third place. “That may come as a relief to therapists who struggle to gain a following on social media or make an impact with online marketing,” the report said.
Three-quarters of therapists take insurance, with Aetna being the most common, followed by United, Blue Cross Blue Shield and Cigna. Therapists who take insurance earn 36% less per session than cash pay, Fulwiler noted. The average insurance reimbursement rate in 2024 was $111.
Therapists who bill insurance largely prefer to do so using a service, while a fifth do it themselves and 16% use a biller. A service was defined in the report as platforms like Alma, Headway, Rula or Grow Therapy. That means it is likely they also contract with those companies to provide therapy as a contractor.
“When therapists go out on their own … they contract with one of these companies as a way to kind of launch their practice,” Fulwiler said.
Most (89%) therapists do not operate a group practice, which typically employs associates who need to complete supervised hours to get their license. A quarter of those in solo practice are interested in growing into a group practice.
A quarter of therapists use artificial intelligence in their practice, Heard found, likely primarily as AI scribes. “That’s actually more than I would expect,” Fulwiler said. Anecdotally, he has seen pushback from therapists about using AI over ethics and privacy concerns. “I would think it would be much less, just based on the reaction that I see online to therapists and AI.”
Editor's Note: A previous version of this story erroneously stated the survey reached 3,000 Heard clients. It has been updated to reflect that not all 3,000 survey respondents were Heard clients.